The Most Interesting Index: Men’s Underwear Index Reflects The Economy
- By:Bory Wang
Many countries use the gross domestic product to judge whether the country is strong or not, and it can also be seen how the national living standard of the country is. But recently, a research institute has seen a trend of recovery in the city's economy based on the sales of men’s underwear. I believe that many small partners can't imagine if this is true? In fact, many countries is going to have this kind of index, and there are more interesting indexes.
Sales Index of Men’s Underwear
In fact, the underwear index has been proposed in many countries, but it is not the first time Former Federal Reserve Chairman Alan Greenspan has a keen interest in men's underwear. That's not because he's focused on fashion changes in the lower body, but because he sees underwear sales as a key economic predictor. Sounds weird, right? But that's just one of many weird ways experts try to predict booms and busts. "He used to tell me...the most intimate piece of garment is men's breathable boxer briefs underwear, because no one but the men in the locker room sees it, and who cares?" longtime NPR correspondent Robert Krulwich said of Greenspan years ago. In 2008, former Federal Reserve Chairman Alan Greenspan put forward the theory of "men's underwear index". Sales of underwear are usually steady, "so in a few cases, if sales drop, it means that men are very strapped and decided not to change their underwear." The so-called men’s underwear index says that when the economy is bad, men will buy new underwear later, which will cause underwear sales to decline, and when sales rise again, the economy will start to pick up.
Underwear as a necessity for men, not a luxury, so sales are generally more stable. But when the economy slumps, men extend the interval between changing to new custom breathable underwear. Sound a little unreliable? But within a few years of the theory, it did roughly match the rate of growth in the U.S. economy. Sales of men's underwear in the U.S. fell sharply during the Great Recession from 2007 to 2009, but rose again in 2010 as the economy recovered, supporting Greenspan's men's underwear index theory. Analysts have been always searching for signs that could signal an economic downturn. Just as a stampede of animals flocking to higher ground can be an early sign of a tsunami, the same rules applied to the state of economy.
So, is the men's underwear sales index a truth or a fallacy?
Through the above analysis of the origin of the mens boxer short underwear sale index, some friends who have scientific acting experience will say that there are so many factors that affect the sales of underwear. As long as there is a change in one factor, the demand curve of men’s underwear will change. If it decreases, the economy will decline. Will it be too absolute?
For this issue, we have to start with the simplification of the economic model. As long as the veil is lifted, economic research is not mysterious at all to a certain extent. The model is a simplified reality. When we look at the biological models, such as the heart, liver, kidney, etc., teachers can use these models to explain to the students in a simple way how the organs of the human body are assembled together. Because these plastic models are stylized, leaving out many details, no one will mistake them for real, despite their lack of authenticity. In fact, it is precisely because of their lack of realism that studying these models is helpful for understanding the basic structure of the human body. The same is true of economics. Unnecessary factors are eliminated, and key decisive factors are left to simplify the model as much as possible. The magic is that the simplified model can still reflect the actual operation.
Why can the men’s underwear sales model be simplified? The main factors that affect demand are price, income, price of related items, hobbies, expectations, and the number of buyers. As a mature commodity, the market price of men’s underwear has reached a considerable degree of stability, and people have a deep understanding of its value. There is a good understanding of the product and the sales are stable. It's not like unfamiliar products, no one will spend $100 to buy a pair of men’s underwear. Underwear is a just-needed item, and there is no substitute for it, so there is no related item that will affect the sales of men’s underwear. Therefore, the most closely related to the sales of personalised mens underwear is personal income.
From the perspective of consumer behavior psychology, men’s underwear, as an internal product, belongs to "unseen" products. For such products, people's requirements for their brands will also be weakened accordingly. In rare cases, even if the underwear is old, it is more or less able to take it off, because it will not affect the decency of the appearance.
Of course, there is not only the "underwear economy", but also the lipstick economy, the short skirt economy, the movie economy, the stockings economy... Maybe we collectively call it the "not too serious economy" (more media call it "effect"). This "not too serious economy" is an economic phenomenon in which some professional researchers use unique small products that are highly relevant to people's daily lives to predict economic growth or recession.
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